1. New Member Orientation

2. OKOSIF NEW MEMBER ORIENTATION Agenda Introductions (5 minutes) OKOSIF History ( 5 minutes) What is a Self-insured Workers Compensation Group and How Does It Work? (10 minutes) Finance (40 minutes) How rates are determined How individual member premium is calculated using the Premium Formula How my individual Experience Mod is calculated How is my dividend calculated and when is it paid? Operations (60 minutes) Safety and Prevention Resources (10 min) Claim Reporting and Management (40 min) Lunch (working)

3. What is Self Insurance Pooling? It is a practice wherein a group of small firms join together to secure better insurance rates and coverage plans by virtue of their increased buying power as a block. Expenses, profits and liabilities are legally shared between the participants.  Financial strength is demonstrated through member‘s balance sheets (combined $2m) and excess insurance protection  OKOSIF purchases 2 types of excess insurance permitting us to identify the worst case financial exposure each fiscal year  Specific Insurance acts like a deductible on a single claim and provides coverage excess of agreed to amount ($450K/ claim)  Aggregate insurance provides protection once the annual losses reach a pre agreed to amount thus capping annual losses.  We are provided oversight by the state of Oklahoma and the elected Board of Trustees.  Biannual Financial Statements submitted to the state, one annual audited and certified submitted with outside actuarial report.  Actuary promulgates our rate which the state regulators provide final approval for use.  Board meetings are held quarterly and rotated between OkCity and Tulsa. These meetings are open to members to attend

5. Oklahoma OSIF History

6. January 1, 1993 – December 31, 2015 Total Revenue: $38,267,547

7. Oklahoma OSIF History

10. SPECIFIC EXCESS INSURANCE Catastrophe insurance coverage which protects the Fund from a severe or high cost claim, and/or a single occurrence with many claims. As an example, if a claim occurs for $1,000,000 and the pre-negotiated Fund Retention for each claim and/or single occurrence is $450,000. The Fund pays $450,000 and the Specific excess insurance pays $550,000. AGGREGATE EXCESS INSURANCE The Fund negotiates with the Aggregate excess insurer a pre-determined maximum accumulation of all the claims dollars it will pay in the period (usually one year). This is called a Loss Fund. When the Loss Fund amount has been reached because the Fund has paid the agreed amount of claims (this is known as exhausting the Loss Fund because the Fund has exhausted the amount it agreed to pay), Aggregate insurance then pays for the Fund’s retention. Excess Insurance

12. Current Board Members Bob Wagner (Chairman) Tim Rich (Secretary/Treasurer) Michael Gentry Kevin Martin Ramona Santiago-Davis Jay Wagner Tonjua Whetstone

13. Individual Member Premium Calculation Payroll (by class code) x rate Discounts/Credits (5% Drug Free, 6% Safety) Experience Modification Factor Deviation Credit (10%) Expense Constant $140

14. Premium Calculation Examples Example 1 – 1.15 Experience ModExample 2 – 0.85 Experience Mod Class CodePayrollRatePremiumClass CodePayrollRatePremium Supervisor8742 60,0000.57 342Supervisor8742 60,0000.57 342 Clerical8810 50,0000.38 190Clerical8810 50,0000.38 190 Restaurant9083 1,000,0002.11 21,100Restaurant9083 1,000,0002.11 21,100 Manual Premium 21,632Manual Premium 21,632 Drug Free Credit5% (1,082) 20,550Drug Free Credit5% (1,082) 20,550 Safety Program Discount6% (1,233) 19,317Safety Program Discount6% (1,233) 19,317 Experience Modification1.15 2,898 22,215Experience Modification0.85 (2,898) 16,419 Deviation Credit10% (2,222) 19,993Deviation Credit10% (1,642) 14,777 Expense Constant 140 20,133Expense Constant 140 14,917 TOTAL PREMIUM 20,133TOTAL PREMIUM 14,917

15. Experience Mod Calculated: Actual Losses Expected Losses Compares individual employer experience with industry average Provides incentive for loss reduction Emphasis on frequency versus severity Experience Rating Adjustment (ERA) – Discounts ‘Medical-Only’ claims 70%

17. Surplus Dividend Distribution Member Surplus Distribution Calculation 1) Member Premium x Loss Fund % = Member Loss Fund 2) Member Loss Fund - Total Incurred Losses = Net Contribution 3) All Positive Contributions are Summed (Negative Contributions are removed). 4) Member Positive Contribution ÷ Sum Total of Positive Contributions = % of Positive Contributions 5) Declared Total Distribution x Member’s % of Positive Contribution = Member’s Surplus Distribution (Dividend).

18. Dividend Example Member #Premium Loss Fund (75% * Premium) Total Incurred Losses Net Contribution (Loss Fund – Losses) Positive Contributions % of Positive Contributions Surplus Distribution (Dividend) 0015,0003,7501,7502,000 2.37 %$ 237 00210,0007,5005,0002,500 2.96 %$ 296 00320,00015,00018,000(3,000) $0$0 00430,00022,5007,50015,000 17.75 %$ 1,775 00540,00030,00020,00010,000 11.83 %$ 1,183 00650,00037,50010,50027,000 31.95 %$ 3,195 00760,00045,00044,500500 0.59 %$ 59 00870,00052,50050,0002,500 2.96 %$ 296 00980,00060,00080,000(20,000) $0$0 010100,00075,00050,00025,000 29.59 %$ 2,959 Total465,000348,750287,25061,50084,500100.00 %$ 10,000 Example: Board declares dividend distribution in the amount of $10,000 for the year 2010. 2010 Loss Fund %: 75% Declared Total Distribution for 2010: $10,000

20. Oklahoma OSIF Website Resources www.okosif.com Report an Accident or Injury 888-770-0932 Board Meetings- Minutes & By laws Company Nurse Role Safety & Loss Prevention Drug Free Workplace (5% premium credit) Employee Injury Resource Guide (Handout of OKOSIF Employee Recourse Guidebook) News & Updates

21. Gallagher Bassett- Post Accident Claim Management Return To Work